The Greek Olive Oil Market Structure

Abstract

Food product differentiation leads to significant price variations among the same prod- ucts, meaning that specific products can be sold in higher prices. An Hedonic Price analysis is adopted to investigate the influence of food differentiation on consumer prices and to identify product attributes’ values for the olive oil market. This will con- tribute to device the most appropriate olive oil differentiation strategies in order to be purchased by consumers in a higher price. The retail price structure was estimated in relation to several product natural attributes, to production and processing conditions, to quality control and to labeling and distribution. Findings demonstrate that olive oil price differentiation is mainly influenced by factors relevant to quality of life, purchase uncertainty, acquisition cost and consumers’ psychological needs. Additionally, vertical integration in production and processing and the retailer size significantly influence the olive oil price formulation